Growth in the postpaid subscriber segment is slowing precipitously across the industry. Stifel Nicolaus analysts estimate that prepaid subscribers grew by 14.7 percent year-over-year while postpaid subscribers grew by only 2.9 percent year-over-year.
Considering the significantly higher revenue generated by postpaid customers (when compared to prepaid), this is not exactly exciting news. So, is losing postpaid customers an unstoppable trend, or is there a way to alleviate the pain?
Operators commonly apply loyalty programs to their postpaid subscribers, offering customers who renew their high-priced contracts discounts on service plans. Others provide loyal customers with bonuses, hoping to keep them longer in their service plan or lure them away from rivals.
However, this does not seem to work. Today’s consumers – even the most engaged ones – lose track or are unaware of the attractive offers and services they can receive. At the same time, postpaid customers expect the same ‘personalised’ web/Google experience from their mobile carrier – receiving relevant offers without being bothered with intrusive ads and promotions.
Operators therefore face the challenge of how to identify each customer’s needs and provide the relevant offer in the right context. The only way this can be implemented is through a trustworthy communications channel, through which operators are able to generate awareness and stimulate response and enrolment.
Some would argue that this can be done using Customer Relationship Management (CRM) systems. But can these systems provide real time offerings and more importantly, offer fulfilment?
Holding on to postpaid customers may include the following business goals:
- Increase usage by carrying out up-sell of unit buckets and providing private pricing.
- Increase fixed monthly revenue by implementing up-sell of recurring packages, price plan migration, andup-sell of add-ons and subscriptions.
- Increase usage of data and VAS by providing trial periods, up-sell of larger data buckets, migrating low entry users to buckets and cross sell between VAS services.
- Reduce churn by up-sell of unit buckets, private pricing, handset upgrades, and contract renewals.
To achieve these goals require real time capabilities. For example, George has a data plan, but has reached 90% of his usage in the second week of the month. Ideally, the operator should be able to automatically alert George that he should update his plan, as well as automatically update the back-end and billing – all in real time.
So how should operators carry out these goals using contextual marketing?
The first step involves a 3-dimensional analysis of the subscriber database, which includes: segmentation variables, events and contextual triggers.
- Segmentation is carried out using customer’s general data variables such as value, proximity to commitment end, price plan type, number of lines, services in portfolio, tenure, etc.
- Events include customer’s actions data regarding such as price plan change, handset upgrade, roaming, data access, service activation/de-activation, response, etc.
- Contextual triggers include usage-based real time counters, clocks (from X, before X), trend threshold (decrease, increase, points…), anniversary, and more.
The results of such a 3-dimensional analysis allow operators to move to the next step and implement a contextual marketing plan, where personalised offers (based on segmentation and events) are delivered at the right time and context (based on contextual triggers). Such offers achieve much higher response rates and superior chances of achieving your business goals.
Another example which demonstrates how an operator can increase ARPU through up-sell of minute buckets, with the goal to up-sell monthly fee buckets to existing customers, is to send the offer out once the target group has been identified. It is important to understand that the offer is sent to each individual customer only when he or she fit the target group, rather than at a pre-defined time set by the IT team.
Based on the response of each customer, the operator will be able to follow up with each customer, and customers who did not respond to the initial offer, will receive an even more attractive one in order to fulfil the up-sell.
To conclude, I’d like to again stress the importance of automatic fulfilment performed in real time as probably the most important variable in the success of such a contextual marketing process.